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How Accounting for Depreciation and Self-Employment Income Affects Labor's Share of Income

Created on May 31, 2016

How Accounting for Depreciation and Self-Employment Income Affects Labor's Share of Income

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Read the original report, "Labor’s Share of Income Little Changed Since 1948," by James Sherk.

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Note: The bottom blue line shows the Bureau of Labor Statistic’s headline measure of labor share of gross income in the non-farm business sector. The middle green line shows this BLS measure, excluding self-employment income from both the numerator and the denominator. The top red line shows total employee compensation in the non-farm business sector divided by net value added in the non-farm business sector, and excluding self-employment income from both the numerator and the denominator.Sources: Heritage Foundation calculations using data from the Bureau of Economic Analysis, “National Income and Product Accounts,” Tables 1.3.5, 1.9.5, 1.12, 1.13, and 6.2, and Bureau of Labor Statistics, "Productivity and Costs," Nonfarm Business Sector.

CHART 3 • BG 3111

Tags: labor, net-income